Has The Video Game Industry Surpassed The Military In Driving The Next Wave Of Technological Change?

from the video-game-industrial-complex dept

For much of the twentieth century, many of the biggest technological advancements were trickle-downs from the military, which took huge government expenditures for R&D and later commercialized that technology. While many people here no longer remember this, the military connection was a big part of what built up Silicon Valley in the early days. However, times are changing. Andy Kessler's latest opinion piece at the Wall Street Journal suggests that the greatest driver of technological change these days appears to be the video game industry. He talks about how China created the world's fastest supercomputer, using chips that were built on video game chip technology:

Fifty years ago, President Eisenhower was worried enough to declare that "We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." No need to worry anymore. That game (pardon the pun) is over: Welcome to the entertainment-industrial complex.

Consider the Apple iPhone, often touted as the tech symbol of our era. It's actually more evolutionary than revolutionary. Much of its technology—color LCD displays, low power usage, precision manufacturing--was perfected for hand-held videogames like the Nintendo DS and Sony PSP, which sold in the tens of millions. Think about how much more productively workers are now able to communicate because of some silly games.

He points out that technologies like Microsoft Kinect and online game technology are likely to start to move into corporate applications before too long as well:

Videogames will influence how next-gen workers interact with each other. Call of Duty, a military simulation game, has a mode that allows players to cooperate from remote locations. In World of Warcraft, players form guilds to collaborate, using real-time texting and talking, to navigate worlds presented in high-resolution graphics. Sure, they have funky weapons and are killing Orcs and Trolls and Dwarves, but you don't have to be a gamer to see how this technology is going to find its way into corporate America. Within the next few years, this is how traders or marketers or DNA hunters will work together.

So why is it that the military has been displaced? Kessler believes it's all about the money:

For one, capital formation. Governments had the unique capacity to raise (read: tax) the enormous capital needed to fund state-of-the-art projects. But a fully functioning stock market can raise billions for productive commercial applications, bypassing the military connection. Hate Wall Street all you want, but it's now better than wars at driving progress.

Second, displacing the military is about high sales volume. Often that means lower costs. The $300 Roomba automatic vacuum, which the company iRobot says it has sold to five million customers, helps drive down the cost of the Army's robotic bomb removers. Volume is especially good at spurring the creation of new applications. Hardware is nothing without software and apps. Caffeine-fueled coders won't even think about writing apps unless there are millions, if not tens of millions, of potential customers.

It's an interesting theory. I'm not sure I totally believe it -- as I think there's some cross-pollination going on, but it's definitely an idea worth thinking about.

Reader Comments

Re: Many of the hit games now

I know that Medal of Honor gave me a new appreciation of D-day...it's one thing to hear about it in the class room. It's another thing to be that guy in the simulation who gets slaughtered trying to invade the beaches.